T-Mobile and Sprint Corporation, key players across the U.S. telecom industry, have entered into a merger pact worth USD 26.5 billion. Experts predict that on receiving the approval from the U.S. antitrust authorities, the deal is likely to create an oligopoly across the country’s telecom sector with only three players dominating the regional market share.
The New York Times reported that a few weeks back, the U.S. Justice Department initiated an antitrust probe into the potential partnership deal between AT&T, Verizon, and a telecom standards firm to prevent customers from switching services. For the record, in the first quarter of 2011, the U.S. antitrust regulators had blocked AT&T’s acquisition bid for T-Mobile and had filed a litigation against the deal in the country’s federal court.
On receiving the green signal from the antitrust division of the U.S. Justice Department, the combined entity of T-Mobile & Sprint Corp. will be termed as T-Mobile and will encompass 127 million consumers. With the growing fears of the labor unions pertaining to job losses, both the firms declared that they are planning to expand their workforce post the merger, particularly in the remote regions. The key officials of both the U.S. telecom companies also asserted that the pact will support their efforts of establishing faster 5G networks in the country.
It has been speculated that the merger will help both the firms to jointly compete against renowned telecom giants such as Verizon, Comcast, and AT&T as well as with the wireless, video, and broadband sectors. The agreement is projected to be finalized during the first half of next year and will lead to annual cost-savings estimated at USD 6 billion.
Reportedly, T-Mobile & Sprint were in discussions over the possible merger three years back and were ready to sign the deal in October last year. However, the talks on forming a combined unit failed over the disagreement on the issue of the control of the joint entity.